Good vs Bad Debt Debate – It Begins

Home News Newsflash Good vs Bad Debt Debate – It Begins
Good vs Bad Debt Debate – It Begins
Share this Blog Post:

Trea Branch (of is kicking butt and taking names – as far as her student loan debt is concerned. Like many of us, Trea graduated with student debt without much concern or a plan to repay it.

However, after facing facts – she was $180,000 in “good” debt. Is there a such thing as good debt?

The bible teaches that a borrower is a slave to the lender. Any debt has the potential to add stress to your life and present as an obstacle to making financial gains. As such, be done with as much as you can – especially consumer debt – as soon as humanly possible. The good news is the enslavement is temporary, and you can remove the shackles whenever you’re ready to get serious about dumping debt.

Trea is and she’s today’s profile for the New Year New You 2015 series.

Good Debt

1. How long have you been actively working on your goal of eliminating debt? What was your beginning debt total (is this with our without the house)?

I’ve been actively eliminating my student debt for about a year now. As of January 2014, I owed $180,000 in student debt, resulting from undergrad and grad school. My husband and I currently don’t own a home, so we do not have mortgage debt.

2. What prompted you to begin?

Graduating with $180k in student debt didn’t phase me at first. I was brought up knowing that debt was bad, but no one spoke of student debt as being bad. It was “good” debt, debt you had to have if you wanted a better life. And where I’m from, most debt is just treated as a monthly bill. You pay the minimum monthly payment (maybe even try lowering that monthly payment), and you pay on it for the next 30+ years. So when I racked up my debt, that’s exactly what I planned to do.

It wasn’t until a conversation with a coworker that my eyes were opened (we’ll call him John). John was telling me how different his lifestyle was from that of his brother. His brother had the typical “successful” life, living downtown, eating at fancy restaurants, driving the expensive cars etc., while John still lived with his parents. John and I had similar salaries, so I knew he didn’t have to live with his parents, so I was curious. He began telling me that he recently paid off $100,000 in student loans, and he was able to do this because of the changes to his lifestyle.

He then went on to tell me about Joe Mihalic [podcast interview]  who paid off $90,000 in 10 months, or so. I just couldn’t believe that there were so many out there determined to pay off such high amounts of debt. I immediately knew if they could do it, I could do it.

My money potential really hit me when, in 2013, my husband and I paid for our wedding in full (with no credit card debt). I was amazed at how much we could save when we were more purposeful with our money, and I knew if I could save that much for an event that lasts all of one day, I could save to knock out these student loans.

3. Why are you blogging about debt freedom? What do you hope to achieve with the blog?

I write posts on debt freedom to help shift the mindset that many of us grew up with. Debt is not something we have to accept for the rest of our lives, and we shouldn’t! In fact, with the right process and guidance you can get out of debt (or avoid it altogether), no matter the balance.

I coach individuals who are ready to finally see progress in their finances. Most are in debt or at risk of going into debt. I help them establish debt-free plans, get ahead of bills, and build the savings they need to get ahead and stay ahead. Working with people one-on-one has always been a passion of mine, and seeing people get on the path to financial freedom lights a fire in me!

4. How comfortable are you talking about finances with your circle of friends or close family? Have you always been this way?

I’ve always been vocal (which is why my website is called Trea’s Two Cents). I’ve been vocal about education, career-progress, and now personal finances. I’m very comfortable discussing finances with my family and friends, and I’m finding that they bring it up more often than I do, now.

I try to be as transparent as possible with my family/friends, in my blog posts, and especially with my clients. I only recommend methods that have worked for me, so it’s really important that people know I’ve done it, I’ve been there!

5. How have you managed to create a healthy partnership with your husband as newly weds merging finances?

I’m very fortunate to have a husband who shares similar financial values. We both have relatively frugal tastes and are pretty disciplined when we’re focused. He’s of course super supportive of my debt-free journey since it will free up money for kids and investing. He was also inspired to set a few financial goals of his own!

What has really helped us is getting together to outline our money goals for the year, and then organizing our finances around those goals. We have different “funds” we maintain throughout the year, and each is treated like its own account (emergency, travel, date nights). We agree to how much we’ll each contribute per paycheck. Throughout the year we’re sure to communicate when we need to adjust (and make sure we’re okay with those implications).

6. What’s the biggest lesson you’ve learned thus far in your debt free journey?

Success on our debt-free journeys has more to do with our mindset than anything else. A mindset shift is what started my journey in the first place. Without it, I would still be okay with owing $180k.

With the right mindset, you have a “do what it takes” attitude toward your debt. You’re willing to cut your spending, work more hours, get the second job, and do what you need to do to beat debt. Without the right mindset, you will have every excuse for why you can’t get out of debt (my debt is too large, but I have kids, I don’t have time for another job, I tried that before, I don’t make as much as you).

The mindset is usually the difference between succeeding and failing.

7. Do you know your anticipated debt free date?

Yes! I have a countdown! I started with $180,000 in January 2014 and I’m now at $97,000 (as of January 2014). I plan to be completely debt free by December 31 2016 (woo woo!).

8. What do you plan to do after achieving debt freedom?

Once I am debt-free, we have short term goals that I will begin focusing on (like buying a car). But my long-term plan is to invest the majority (if not all) of my student debt payments, so that my husband and I can retire more than comfortably when we’re 50. Financial independence is our ultimate goal!

Good vs Bad Debt


Before you go, get your FREE copy of our tips to save more money!

* indicates required

Set 1 (600×90)

Share this Blog Post:

Leave a Reply

Your email address will not be published.